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The Colts announced that they are releasing defensive tackle Arthur Jones who played in all of 17 games across three years after signing a big $33 million contract in 2014. Jones was one of many questionable signings made during that period by Indianapolis and arguably the worst. Jones had a relationship with head coach Chuck Pagano and there was a thought that he would far exceed his level of play in Baltimore when he switched to Indianapolis and that never materialized. Continue reading Colts Cut Arthur Jones »

As Ryan continues his excellent State of the Rebuild series, in which he looks at new General Managers and their situations, I thought it might be worthwhile to just give a general overview of the manner in which teams are utilizing free agency to build their starting rosters for the 2013 NFL season. For this I will look at the AFC (I’ll be happy to run the numbers for the NFC if requested) and use the current starting players listed on Ourlads depth charts. Traded players do not count when looking at free agency unless they signed a new contract with the team. For example Chris Ivory of the Jets would count (though he is not listed as a starter) but Alex Smith of the Chiefs would not.

Free agency is often a short sighted approach to building a football team. The NFL is a young man’s game and often the most productive years for a player come during the first six or seven seasons of a career. For some teams this leads to a philosophy of extending draft picks early in their careers. The manner in which this works is that a team, after a players third season in the league (it used to be his second season), extends the player for a period of anywhere from three to five seasons on top of his existing contract.

The benefit to this is that the player is locked up for what are considered his “prime” football years with minimal down the road impact if the player needs to be released for dropoff in performance. The reason the impact is minimized is because bonus money can only be prorated over a 5 year period, leaving the final extension years often clean from a salary cap standpoint. Teams also have a great deal of leverage in these early extension negotiations and can lock up players at below market values. In general you are sacrificing the salary cap benefit of the rookie contract for long term salary cap flexibility. The 49’ers, Packers, and Eagles have all been major proponents of this strategy.

Of course there is risk involved in this strategy. First of all you have a very small sample size of real game action to evaluate the player. For many players you can throw a rookie season out simply due to the immense learning curve of the NFL, leaving a team with just one or two years to evaluate the talent. If the talent busts you are stuck with cap charges you never would have had if you allowed him to play the rookie contract out. This is how the Patriots got into cap problems with Aaron Hernandez. While that is an extreme example it shows the negative side of the early extension.

It can also be a difficult strategy to stick with because GM’s jobs are directly tied to wins and losses and this strategy is a better long term rather than short term strategy. You are sacrificing the opportunity to get better immediately to stay better over a longer period of time, which could lead to some losing seasons early in the philosophical transition. That often leads to a team going in the other direction and looking to build via free agency.

There are various types of building through free agency. There is the more short term enhancement designed to put a “win now” team over the top. The Broncos would be an example of this. They will have nearly $20 million(as measured by annual value) in new talent take the field for them this year, but three of those four players are signed for 2 or fewer seasons. This, in essence, gives the team a great escape if the “win now” team doesn’t win. There is no long term commitment whatsoever.

There is the barren roster situation which would be exemplified by the Raiders. The Raiders are essentially an expansion team and need bodies on the field. They have eight new starters signed as free agents, tied for most in the AFC. They are not signing them to turn the franchise around; it’s simply better than the alternative of the completely unknown undrafted free agent. Of those eight, six will be free agents after this season. It is a stop gap solution with no long term damage.

There are other teams that see free agency as an opportunity to add one or two big pieces to the long term plan of the team. The Browns and Titans would both fit in that category. They added some significant big money players but not to the point where it completely overhauls their roster. These players are not short term solutions either but more admissions of either draft failures or a desire to not spend future draft allocations on these positions.

Finally you have the complete rebuilding approach. I find this to be the most fascinating to watch unfold because the expectations are not so much to build on what is in place but to turn a franchise completely around in a very quick manner. Failure at the early stages of this process often lead to significant salary cap damage down the line. This strategy is completely opposite to the “extend early to avoid the cap pain late” approach. Teams that build this way often do not have a happy ending when the 28 year old free agent makes the turn past 30 and they have all kinds of guarantees or bonus prorations in their contracts. What makes this even more difficult is that you are not putting one or two parts into an existing system but multiple pieces. With limited practice time in the preseason it can leave units of 11 that need to function as 1 right out of the gate struggling for answers on the field. By the time they figure things out the season could be lost and GM’s jobs will be in jeopardy.

The two AFC teams utilizing this strategy this year are the Miami Dolphins and Indianapolis Colts, though there are differences to both internally in the way that they approached this. Miami is one of the most unique attempts at a quick rebuild that I can recall. They have more or less been waiting for the last two years for contracts to run out so that they had significant money to spend. Miami doled out over $42 million in annual salary to other teams’ free agents. That is nearly $8.5 million more than the next closest team. They will have 7 new starters this year, nearly 1/3 of their starting roster.

What makes their situation even more unique is that for all this money spent, $13.5 million of it is just for one year rentals. That $13.5 million represents the contracts given to TE Dustin Keller, CB Brent Grimes, and RT Tyson Clabo. Normally you would expect this more on a “win now” team where you go all in on a few short term pieces, but the Dolphins have shown no signs of being that type of team. They have been a steady as a rock 6 to 7 win team since their trip to the playoffs in 2008.

They also have five other starters in their walk year (Randy Starks, Paul Soliai, Chris Clemons, Koa Misi, and Richie Incognito) which could keep the Dolphins in line for another major overhaul in 2014. With a good deal of cap room to carry over into 2014 and some wiggle room to restructure existing contracts, Miami could conceivably go on a large spending spree again in 2014, potentially under a new GM if the team fails in 2013. So it’s not really a big window of opportunity for the team as presently constructed but more of a one year vision with an open window to improve internally and externally in the future.

The Colts are different. They have taken an approach that you can take a relatively young overachieving team, and I’m not sure any team has ever overachieved more than the Colts last season, and quickly take it from the learning stages right into the advanced playoff stages. Indianapolis will have 8 new starters in 2013, 5 of whom are signed for 4 or more seasons. They committed 26 seasons to these 8 players so this was a long term plan, not a short term fix.

But the Colts are also making a leap of faith on the talent they acquired. These players are not so much proven talents as they are key backups now expected to start. The 8 players only combined for 72 starts in 2012. S LaRon Landry and RT Gosder Cherilus are really your only true proven starters. Almost everyone else the team signed long term comes with a huge “buyer beware” sign and the decisions left a number of people around the league wondering why they paid so much for some of the players.

That said I would consider this a more traditional approach to building via free agency with long term deals as the centerpiece. Normally teams might wait one more season rather than right after the rookie year of a number of key pieces but the Colts are young and cheap enough to where this may just be the prelude to the main event which could take place in free agency in 2014. They will be tough to outbid next year if they want to add more pieces.

I do think that many teams will watch the success or failure of the Colts and Dolphins very closely. There are a number of teams that are going to have significant cap room next season and what could be impatient owners and/or fanbases that want to see results fast. These teams include the Raiders, Jaguars, Jets, Browns, and Bears. If the Dolphins can go from a 7 win to an 11 win team it is going to be hard to state that you want to avoid free agency and build via the draft on a 3 year plan. But if Miami goes 7-9 again and the Colts fail to make the playoffs it will likely be another reason to not go wild in free agency.

A lot may hinge on these types of teams besides free agency philosophies. Spending in general was down last season on most positions other than QB and WR. The flat salary cap has made some teams a bit more cautious than they were in the past with their spending and as a result free agency in 2013 was almost a non-event outside of a handful of contracts. Players need some of these big money contracts to actually result in improved won-loss records and playoff success to convince teams that spending is just as important as drafting.

I’d actually say it is far more important to the players to see players like Mike Wallace and Paul Kruger help turn the fortunes around of their franchise than it would be for a bargain chip like Wes Welker to push the Broncos to the Super Bowl. While a player like Welker would show that you can enhance your results by participating in free agency, his next to nothing contract would still signal that teams should put low caps on their offseason evaluations. If the big money items make a meaningful splash more bidding wars could ensue.

The following chart illustrates the annual amount spent per team on 2013 starters that came via free agency. The two lines show how many players were signed and how many total years were potentially invested in those players. If you would like to see an overview of the NFC feel free to send me an email.

With Joe Flacco set to break the bank and become the highest paid player in the NFL I wanted to look back at the two players who are universally regarded as the best QBs of the generation and their contract history to see the difference in approach to the financials. Of course those two players are Tom Brady and Peyton Manning.

Both players had very different paths to the NFL. Peyton Manning was the number 1 overall pick in the draft in 1998. He was the most heralded prospect since John Elway 15 years earlier. Manning from day one was expected to be the most prolific passer in the NFL and lead the Indianapolis Colts to great heights. Brady was a non-descript 6th round draft pick in 2000. 198 players were selected before Brady. 6 QB’s came off the board first including “stars” such as Chris Redman and Tee Martin. Brady was expected to maybe be a backup to Drew Bledsoe.

The differential in draft status makes some of the financial comparisons between Manning and Brady difficult. The pay differential between a top pick and the 199th pick is gigantic. That discrepancy would have existed if Manning proved to be as bad as JaMarcus Russell. So to make thing a little more fair I want to look at each player as they moved into their extension years. We will start with Manning.

Peyton’s first contract ended in 2003 and he signed his first extension in 2004. Manning, at that stage of the game, was universally regarded as the best QB in the game, but lacked any type of playoff success having just lost to Brady and the Patriots and the year before suffering a 41-0 loss to the New York Jets. It was a 7 year contract worth $98 million dollars with just over $35 million coming in the first year of the contract. Manning and the Colts played the entire contract out all the way thru 2010.

By 2010 Manning had finally won one Super Bowl and had recently been to a second one that he lost. There were some health concerns and he was well into his 30s, but the multi time MVP was still regarded as one of the top 2 or 3 in the NFL. He got paid as the best. This time it was a 5 year $90 million dollar deal with his agent again getting a massive payout on the front end with $26.4 million coming in the first year. That proved to be extremely smart as Manning was injured, never played a game, passed go and collected his $26.4 million before being released. Manning signed a deal with the Broncos in 2012 worth up to $96 million. $18 million came in year 1 and as long as his neck is healthy he will earn another $40 million over the next two years.

Brady’s first new contract came in 2002, the year after winning the Super Bowl and Super Bowl MVP honors. He parlayed that into a deal worth just over $30 million. Quite a difference a few years makes as Eli Manning, Ben Roethlisberger, and Joe Flacco parlayed their Super Bowl wins into record setting contracts. Granted those players had more time in the league than Brady who was still a relative unknown despite the trophy, but in todays game people are clamoring for huge raises for Russell Wilson and Colin Kaepernick, players who have yet to accomplish as much as Brady had in his first real year of action. Its the way the game has changed.

Brady’s next extension came in 2005. By this point in time the Peyton vs Brady argument was probably at its peak. Brady had won 3 of the last 4 Super Bowls and always beat Manning head to head. He didn’t have the stats that Manning had but he had more success. Brady signed a modest $48.5 million dollar contract worth around $12.1 million a season at the time Manning was on a $98 million dollar deal worth $14 million a season. Think about that for a minute. 3 Super Bowls and 2 Super Bowl MVPs and he could not earn more than Manning. Eli took one Super Bowl MVP and lapped his brother. Flacco is about to take one Super Bowl title and pass Drew Brees. Brady wasn’t the top guy. Not even close.

In 2010 Brady signed another 4 year deal this time being the market setter with $18 million a year coming his way. It became the framework for the latest Manning contracts who could not surpass the APY with Indy but negotiated much better front end terms. Brady’s latest deal has been highly publicized as being well under market value.

Here is how the cash flows for the two players will compare post rookie deals. For the sake of comparison I will consider Brady’s first year payout to be in 2003 since that is when the extension officially kicked in. He received a signing bonus in 2002 but Ill add that to his cash payment in 2003. Since all signs point to Manning checking out medically I am also including the last two years for him at $20 million. My assumption is he will retire after that point. Now I know some might say that Brady will still have $29 million set to kick in which is true but he is going to have to play for another 4 years to earn that and that changes the timeframes.

Over the 11 year period Manning will outearn Brady by $31.275 million. Brady’s 11 years post rookie contract average about $13.739 million a year. Peyton is $16.582. Now some of this should be credited to the Patriots who have done a fantastic job of extending Brady early and staying ahead of the changes in payscale of the position to get him on the cheap. Some of the credit goes to Brady who clearly has not pushed as hard as he could to keep pace with the market. I think its also interesting to see how Manning is probably the guy really responsible for the current payouts in the QB market as there is now a pure premium paid for a QB compared to Brady’s first two extensions when it was not nearly the same kind of premium.

I think it also shows the big difference between having an absolute shark as an agent versus a good agent. Manning is repped by Tom Condon and CAA who are pretty much the premier QB agency. They go to battle in the negotiating room and usually come out on top. Brady’s team came to mutually beneficial agreements while Manning’s pretty much put the boots to the throats of the Colts and Broncos. For Brady to match Manning’s post rookie earnings he is going to either need the Patriots to renegotiate another deal after 2014 or he has to play thru at least 2018. It will take him 5 extra years to match Manning’s pay and if Manning goes beyond these next two guaranteed years the path becomes even longer for Brady. There will always be a debate as to who was better but financially there is no question as to who came out on top.